Net sales rose 80% in the quarter to $957.3 million, helped by project sales, and net income nearly doubled to $110.9 million, or $1.27 per share. At its current price, the stock trades at just about 14.5 times this single quarter's earnings.

What really had investors jumping for joy this morning was the company's increased guidance. Net sales are now expected to be $3.6 billion to $3.9 billion, an increase of $0.1 billion from previous guidance, and the expected earnings-per-share range was bumped up $0.20, to a range of $4.20 to $4.70.

What is amazing about these results is they contrast from what we're hearing out of China. Trina Solar (NYSE: TSL) , Yingli Green Energy (NYSE: YGE) , and Canadian Solar (Nasdaq: CSIQ) have all lowered shipment and margin guidance for the second quarter in recent days, while First Solar is upping its guidance.

Key numbersFirst Solar's production in the quarter was just 369 megawatts, using just 63% of available capacity. The company also said cost per watt was $0.72, down just a penny on the year, but costs would have been $0.64 if not for underutilization and upgrades.

Conversion efficiency, the company's competitive disadvantage, was up 0.2% from last quarter and 0.9% from a year ago to 12.6%, much more competitive with Chinese modules than in previous years.

First Solar was also able to up its gross margin to 25.5%, a 10.1% increase from last quarter.

Cash was down slightly from the first quarter to $744 million, but the company's long-term debt declined 40% to $519 million. Project sales made that decline possible, and we'll probably see swings in both cash and debt as projects are financed and sold.

Foolish bottom lineFirst Solar's strategy of focusing on sustainable markets with hot climates and building systems with its low cost of capital appears to be paying off right now. That doesn't mean the company's position isn't still threatened by crystalline silicon module makers, but if the company can continue to increase efficiency and cut costs at a steady rate, it may have found its niche in the market.

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